The telecom giant earned 91 cents adjusted per share and generated $39 billion in sales. Wall Street called for AT&T to earn 87 per share on a non-GAAP basis and to post revenues of $38.7 billion, according to FactSet.

Shares of AT&T dropped about 1.3% to $31.23 after hours. The stock has fallen about 18% year to date.

The Dallas telecom and media group added 342,000 subscribers to its DIRECTV NOW service, bringing total subscribers to the streaming pay-TV package to 1.8 million. Including online and traditional satellite and cable TV, AT&T added 80,000 net video subscribers.

The company also gained 46,000 net postpaid phone subscriptions.

AT&T closed the purchase of Time Warner for $85.4 billion, or $108.7 billion including assumed debt, in June. The Department of Justice has appealed a U.S. District Court ruling that allowed the Time Warner deal to close, but expect AT&T Chairman and CEO Randall Stephenson to take a victory lap in the first earnings call since the transaction closed.

Stephenson's lieutenants will be on the call, including WarnerMedia CEO John Stankey, AT&T advertising CEO Brian Lesser, AT&T Communications division CEO John Donovan and AT&T International CEO Lori Lee.

Rival Verizon (VZ) beat expectations before the market open Tuesday, with earnings of $1.20 per share in the second quarter that topped forecasts of $1.14 per share. Verizon's wireless services business grew nearly 1% to $15.75 billion, topping expectations of $15.3 billion. Not counting new rules on accounting for revenues, the sales grew 2.5%.

China's economy slowed to its weakest growth rate since 1990, official data confirmed Monday, as a damaging trade war with the United States, and efforts to curb domestic pollution and reckless lending, took a major bite out of the world's second largest economy.